Last summer, Mayor Lori Lightfoot changed the rules for how Chicago allocates its precious allotment of federal low-income housing tax credits.
She wanted to chip away at the city’s 120,000-unit shortage of affordable housing — and that was long before layoffs tied to the coronavirus made the problem worse.
On Monday, 11 projects expected to create a combined 1,083 units were given the go-ahead — and the tax credits to proceed under those new rules.
The combined cost of those designated projects is nearly $400 million. They will use $13.2 million in low-income housing tax credits — 9% of the city’s allotment — to generate $126.2 million in private equity. Another $60.4 million will come from federal subsidies and $23.5 million from tax-increment financing.
The projects include the winner of an “international sustainable design competition” in East Garfield Park that will use what City Hall described as a “first-of-its-kind modular construction produced at a Chicago factory.”
The winners are:
• Lawson House, 30 W. Chicago Ave.
• Roosevelt Square 3B, 1201 W. Taylor St.
• 43 Green Phase 1, 321 E. 43rd St.
• Park Station Lofts, 6300 S. Blackstone Ave.
• The Chicago Lighthouse for the Blind Residence, 1800 W. Roosevelt Rd.
• Garfield Green Apartments, 201 S. Kedzie Ave.
• Metropolitan Apartments, 3557 W. Lawrence Ave.
• Encuentro Square, 3745 W. Cortland St.
• 1850 South Racine, 1850 S. Racine Ave.
• West Haven Park IID, 223-57 N. Damen Ave.
• Park Boulevard 3B, 43 W. 36th St.
“We know it’s important to save the structures we have if we can. One thing that we’re excited about is that we were able in this round to preserve our single largest single-room-occupancy building in the city of Chicago. That’s the Lawson House. That’s an example of a preservation deal that matters a lot to us,” Housing Commissioner Marisa Novara told the Chicago Sun-Times.
“We’re also able to do new construction in parts of the city that have been lacking development [in a way that] preserves some affordability in the mix of changes that may be occurring. You’ll see that with development at the end of the 606 Trail. You’ll see that with development on the east side of Woodlawn and in East Garfield Park as a result of a request for proposals that was a design competition. There’s a lot we’re excited about here.”
Affordable housing projects are notoriously difficult to finance. To make it work, they must rely on a patchwork quilt of financing.
Novara called federal tax credits the “heart and soul of the affordable housing community” and the city’s “biggest opportunity” to “make an impact.”
Even so, the projects announced Monday create only 1,083 units. That’s just a fraction of 1% of the 120,000-unit shortage of affordable housing that, Novara acknowledged, is likely to grow because of economic hardships caused by the coronavirus.
“This is the national reality that we live in. This is a country that has chosen to give away multiple times more money to homeowners in the mortgage interest deduction than it has toward low-income renters,” Novara said.
“This is the single biggest source that we have as a city to finance affordable rental development. … That’s why we’ve had a very thoughtful process. Since the applications came in in the fall, our team has been meeting weekly with a cross-departmental team. ... They’ve reviewed each and every project in detail to get to this final eleven.”
Homeless advocates and their City Council allies have pressured Lightfoot for nearly a year to deliver on her campaign promise to raise Chicago’s real estate transfer tax on high-end home sales and earmark a hefty chunk of the money to bankroll affordable housing.
Lightfoot has adamantly resisted those efforts. She has argued that a city facing a $1 billion spike in pension payments — even before the pandemic sent the stock market into a nosedive — cannot afford to take money off the table, no matter how worthy the cause.
The next round of low-income housing tax credits will be awarded two years from now.
“There’s no one way to increase our affordable housing supply. There’s no one thing that, ‘Oh, great. When we get this next round out, we’ll solve the whole problem.’ What we are doing is saying, ‘Here’s one resource.’ We’re gonna maximize it and do the absolute best we can to get across our entire city and across a range of needs, ensuring that we’re working with a range of developers,” Novara said.
“At the same time, we’re working on a bunch of other things. We’ve been working on legalizing accessory dwelling units. That will help to create more affordability throughout this city.”